If your goal for being an entrepreneur is to enjoy the life style you want without having to fully retire, how big should your business be? What are some of the things you should think about?
Seth Godin recently commented that he had been doing a lot of thinking about issues of scale and units of measure. He concluded: “Many businesses that are in trouble are in trouble for a simple reason: they’re the wrong size”.
If you are the typical Baby Boomer Entrepreneur, looking for a business as an alternative to full retirement, what size fits your life goals? What are the units of measure you should consider? Here are a few to start:
- How much of your time should your business consume?
- How much of your financial resources should be invested in the business?
- How much personal cash flow should your business produce for you?
- When do you need that cash flow?
- How big a geographic scope should you serve?
- How many employees do you need to deliver on the promises you are going to make to your marketplace?
- Are you delivering a full scale system solution to your customer’s problem or a piece of the entire system?
- If you are successful, can you scale the business up and still enjoy the quality of life that is your goal?
The folks at Small Business Labs continued the discussion by commenting in their blog and sharing some of their research.
They observed that most industries are moving towards a barbell shaped industrial structure with a few global giants on one end and lots of small businesses on the other. Mid sized firms are being acquired by the larger firms or squeezed out.
Their second major observation was that variable cost business models allow small firms to be competitive with large firms in an increasing number of market spaces. New technologies have reduced the cost of starting and operating a business.
So, baby boomer entrepreneur, what is the answer for you? What combination of size and agility will allow you to compete in your market while still allowing you to live your desired lifestyle?
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